1. Field of the Invention
The invention relates to methods for increasing the likelihood of locating property owners and identifying the U.S. state, Canadian Province, or foreign jurisdiction of the property owner's last known address.
2. Brief Description of the Prior Art
Every U.S. state & select foreign countries have unclaimed property laws which declare property (including bank accounts and other financial accounts) to be abandoned after a period of inactivity typically in the three to five year range. During this abandonment period landlords, banks, utilities, hospitals, brokerage firms, mutual funds, insurance companies, and other organizations are required to use due diligence to attempt to locate the property owner. If the property owner cannot be located, then ownership of the property is transferred to the state or province's abandoned-property division or unclaimed property office, which in the context of this scenario is known as “escheat”.
According to decisions of the United States Supreme Court, if the rightful owner cannot be located, the abandoned property must be returned to the state of the property owner's last known address. The business in custody of the property has an obligation to make a reasonable effort to identify the correct state of escheatment. Once all reasonable attempts are exhausted, if the address still cannot be identified, the property is returned to the state of incorporation of the business holding the property.
Surprisingly, satisfying reasonable due diligence requirements by identifying the appropriate escheat jurisdiction can be very difficult. A typical escheat process often requires extensive and redundant manual review of individual accounts by multiple parties, including, but not limited, to the organization holding the funds, their transfer agent, the unclaimed property clearinghouse and the individual state or provinces' unclaimed property departments, as well as a variety of attorneys, oversight committees, and vendors functioning in a subcontractor capacity. This process is made more difficult by jurisdiction filing deadlines which often do not allow for adequate time for the manual review process. This reduces the accuracy of the escheat and causes an unnecessarily large percentage of abandoned property to escheat to the state of incorporation of the property holder in error.
The escheat process can be especially challenging because of the age of many abandoned accounts and the poor condition of the account file. In the case of U.S. accounts, because many abandoned accounts were established so long ago, some actually pre-date the invention of zip codes. Additionally, many of the streets, towns and cities reflected in lapsed account owner files either no longer exist, or have had their physical boundaries redrawn. Even those accounts that were created more recently can cause problems as zip code changes occur to coincide with demographic trends, population growth and industry development. Confusion over the appropriate state abbreviation is also a problem. For example, it is not unusual for someone to incorrectly abbreviate Arizona as “AR”, rather than “AZ”. In actuality, “AR” is the abbreviation for Arkansas, which is often incorrectly abbreviated as “AK”, the correct abbreviation for Alaska, which, in turn, is often misidentified as “AL”, the correct abbreviation for Alabama. There is also routine confusion with abbreviations for all of the “M” states, and other states as well. These address errors render most data parsing tools ineffective. These challenges can often be even more difficult for foreign accounts, which have fewer addressing standards defined.
In addition to identifying the proper escheat jurisdiction, it is also important to be able to provide support documentation substantiating each escheat recommendation. As individual jurisdictions continue to follow the trend of enacting new legislation aimed at tightening guidelines, fewer and fewer organizations will be capable of satisfying the increasingly complicated due-diligence requirements.